YGoY

The Row About India’s “Chop Shops”

New York senator Charles Schumer has opined that India’s blue-chip software giants are nothing but “chop shops”. A chop shop sells stolen automobile parts. The senator may be trying to cater to domestic sentiment by demonising Indian software companies, as mid-term elections are due in November. And, what better way to do that than by implying that their activities are suspect and dodgy, if not illegal.

Infosys, a True Giant
For the record, Infosys, the company specifically mentioned by Charles Schumer, employs about 115,000 employees worldwide. Among them are 1,300 American citizens or permanent residents, who are employed in the U.S.

Indian Firms to Pay for U.S. Border Security!
What may be railing the likes of Schumer are H-1B visa holders, who work for Infosys and other companies on temporary work visas. The U.S. government is also zooming in on this category. Any company that has more than half its U.S. workforce on work visas, may need to pay $2000 more for each work visa. The U.S. government intends to use the hundreds of millions of dollars that this move will raise, to beef up security on the U.S.-Mexico border. The Indian software industry estimates that the visa fee hike, would cost Indian companies about $250 million annually.

Red, White and Blue American Companies
Charles Schumer also batted for true blue American companies such as Microsoft and Intel, certifying that they play by the rules. Thus, he makes it seem as if companies such as Infosys are dodgy. Infosys’ HR head, Mohandas Pai, immediately issued a rejoinder affirming that the company is law-abiding and believes in playing by the rules. For the record, even “All-American” firms such as Microsoft and IBM utilize H-1B visas.

Indian Firms Pay $1 Billion in Social Security
The enhanced visa fee might actually boomerang. Indian companies may respond by employing extra workers in India, rather than sending them to U.S. Besides, the likes of Schumer should know that Indian software firms pay more than a billion dollars annually in social security to the U.S. government. These companies do not get any any benefits nor is there any chance of refund, as there is no appropriate agreement between the U.S. and India.

Increasing U.S. Protectionism
Thus, United States, the beacon of free trade for the world, does not hesitate to indulge in protectionism to cater to domestic sentiment. An Indian commerce industry official termed the visa fee hike extremely unfair, trade-restrictive and discriminating. Indian software industry experts urged the Indian government to take up the issue with the U.S. government.